Over the past couple of years, the process of extracting tight oil was on a decline. Today it has taken a turn and even surpassed production predictions. The US is getting closer to energy independence. But, is this just a blip or will it hold a steady rise?
What is Tight Oil?
Tight oil, crude oil, is found in tight geologic formations with low permeability. Tight oil is embedded in low-permeable shale, sandstone, and carbonate rock formations. To extract tight oil, it requires drilling techniques, such as hydraulic fracturing and horizontal wellbores. Previously it was expensive to extract the oil. With technological advancement in drilling and completion techniques, as a result it is easier to unlock vast quantities of oil from tight reservoirs. The U.S. Energy Information Administration (EIA) estimates that 4.67 million barrels of crude oil were produced from tight oil resources in the United States in 2017.
Who are the Tight Oil States?
The US is becoming energy independent due to exporting more liquid gas than it imports. Texas and North Dakota are the largest tight oil producers. These states have vast amounts of resources in Eagle Ford, Barnett, and Bakken regions. The east coast has the Marcellus Shale play, which is large but has mixed stack plays.
What is The Future?
US onshore liquid gas production is on the rebound. Tight oil is expected to grow by 2 million barrels per day over the next two years. This prediction has doubled the rate forecasted a few months ago. There are two factors for the rise. First, there was a leap in production in 2017, especially during September and October with 0.6 million barrels per day. Second, there is a backlog of 3,000 drilled uncompleted wells which will jump into operation. About 30% will be completed, which will bring more oil producing wells in 2019. The Permian (located in Texas and New Mexico) continues to look like the best option for new investment. As this play becomes more understood, there seems to be more potential for returns from new investment companies.
BTL and Energy Independence
BTL Liners believes tight oil has the potential to lead a new era of economic growth and energy stability in North America. We encourage domestic jobs and energy independence for our country. We are proud to be involved in the growth and development of our country’s future with such a promising industry.
